Last updated: April, 2025.

OVERVIEW:

This replication package contains data and code to produce the analysis reported in "Policing Carbon Markets". Details on the underlying data and instructions for replication are provided below.


DATA AVAILABILITY:

Most of the data used in the analysis is publicly available, and the raw data are copied in this replication package. There are three exceptions. Information on firms' listing status and location of headquarters were obtained under license and compiled from (1) Orbis and (2) Bloomberg. The authors do not have permission to publish these data, so these files are either omitted from this replication package or they have been replaced by missing values. As a consequence, some of the code will produce error messages. Finally, some of the compliance and enforcement data were obtained through (3) direct correspondence with national registries. There being no restrictions on sharing these data, all of the relevant information is included in this replication package. However, the correspondence itself is covered by confidentiality rules.


SOFTWARE AND HARDWARE:
Below is a list of hardware and software used to produce the analysis reported in the paper.

Hardware:	iMac Pro (2017)
OS:		macOS Sonoma Version 14.4.1
Software:	R 4.2.3 GUI 1.79 High Sierra build (8198)
			Load packages: XML, methods, plyr, readxl, miceadds, lfe, and their dependencies.


DATA SOURCES:
Below is a list of data sources used to produce the analysis reported in the paper, and information on how to access the data (file paths in parentheses). Variable descriptions for each data set are included at the end of this README file.

- EUTL database, downloaded on May 4, 2021, from the EU Transaction Log at https://ec.europa.eu/clima/ets/. (Data/EUTL2021/..)

- EUTL-Orbis link, downloaded on May 6, 2021, from the European University Institute at http://hdl.handle.net/1814/64596 (Data/EU_ETS_Acccount_to_Firm_Matching_Incl_NACE.xls)

- Orbis listing information for EU ETS companies, downloaded on May 6, 2021 from Bureau van Dijk's Orbis database (Data/EUIETSlistings.xlsx) (File not included)

- Bloomberg listing information for EU ETS companies, downloaded on April 1, 2021 from a Bloomberg terminal. (hard-coded in  script 2_AddFirmData.R, but values replaced with "NA")

- Article 21 reports, downloaded on May 6, 2021, from the European Environment Agency at http://cdr.eionet.europa.eu/ReportekEngine/searchdataflow (Data/Article21/..)

- EU ETS emission and allowance aggregates, downloaded on August 1, 2021 from the European Environment Agency at https://www.eea.europa.eu/data-and-maps/dashboards/emissions-trading-viewer-1 (Data/(Chart)_Historical_emissions_data.csv)

- EUA prices, downloaded on April 19, 2024, from https://icapcarbonaction.com/en/ets-prices (Data/EmissionTradingPrices-23-01-2024..xlsx)

- Trends and Projections in the EU ETS, downloaded on August 10, 2021 from the European Environment Agency at https://www.eea.europa.eu/publications#c7=en&c11=5&c14=&c12=&b_start=0&c13=trends+and+projections+in+the+EU+ETS. (Hard-coded in script 4-Analysis.R)

- Trends and Projections in the EU ETS, downloaded on August 10, 2021 from the European Environment Agency at https://www.eea.europa.eu/publications#c7=en&c11=5&c14=&c12=&b_start=0&c13=trends+and+projections+in+the+EU+ETS. (Hard-coded in script 4-Analysis.R)


REPLICATION INSTRUCTIONS:
The data processing and analysis is executed with four scripts, described below. The first three assemble and clean the data, while the fourth performs the analysis reported in the paper. The replication archive includes the processed data, to allow users the option of directly executing the fourth script without first re-assembling the data.

1_CompileEUTL.R - This script assembles EUTL records on EU ETS installation.

2_AddFirmData.R - This script merges in information about the firms operating EU ETS installations.

3_AddRegulatorData.R - This script merges in information about the powers and actions of national regulators to which the EU ETS installations are subject.

4_Analysis.R - This script performs the quantitative analysis reported in the article.
